The Manchester firm behind the Intellicig electronic cigarette brand has been sold to British American Tobacco in a deal which lands its founders a huge windfall.

The Manchester firm behind the Intellicig electronic cigarette brand has been sold to British American Tobacco in a deal which lands its founders a huge windfall.

CN Creative, which has its research and manufacturing operations on Grafton Street in the city and its sales, distribution and accounts teams in Accrington, is understood to have been acquired for between £30m and £50m, according to informed sources.

The FTSE 100 giant, whose cigarette brands include Dunhill, Pall Mall and Lucky Strike, said the acquisition was a natural extension of its approach to tobacco harm reduction.

Kingsley Wheaton, BAT's director of corporate and regulatory affairs, said: “Our core business is, and will remain in, tobacco but we've always made it clear that our goal is to provide those adult smokers who are seeking safer alternatives to cigarettes with a range of reduced-risk products that will meet their varying needs.

“And we believe that the innovative e-cigarette technologies that CN Creative has been developing over the past few years will help us move close to achieving that goal.”

CN Creative founders Chris Lord and David Newns said: “This is an exciting opportunity that allows us to accelerate the development and successful launch of our innovative and new e-cigarette technologies.”

The pair founded the business in September 2008 and it currently employs 54 staff.

Intellicig is stocked by more than 5,000 retailers and independent pharmacies in 26 countries.

The market for electronic cigarettes is worth £30m a year in the UK and 500 million dollars in the US. E-cigarettes are aimed at smokers who want to quit or cut down but still want a nicotine kick.

In addition to Intellicig, the firm is developing its own Nicadex product to meet anticipated regulatory requirements in the UK. Nicadex is a hand-held, battery-powered device which delivers purified nicotine to the user through vapourisation.

CN Creative achieved revenues of just over £2m in the 12 months to September and earlier this year received a £2m investment fillip from Advent Life Sciences in return for a 50 per cent stake.

It was also boosted by the arrival of former Airtours chief executive Tim Byrne as its finance boss.

Mr Byrne said today it was 'business as usual' for CN Creative but added that the takeover by BAT was a 'game-changer' for the company.

Advisers who worked on the deal included a team at law firm Addleshaw Goddard led by Neal Shepherd and Darren Harris.

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